A Joining of Cultures: Sitting down with Dan Starr, Do it Best President and CEO
Earlier this week, Do it Best, the nation’s largest member-owned co-op for hardware and lumber products, announced its bid to acquire substantially all assets from True Value, a Chicago-based hardlines wholesalers that filed for Chapter 11 bankruptcy under private equity ownership.
LBM Journal sat down with Dan Starr, Do it Best President and CEO, to better learn what this potential acquisition meant not just for individual LBM dealers but for the overall landscape of the LBM industry.
When asked what this acquisition would mean for former True Value members, Starr acknowledged that many True Value members have questions and concerns. “A lot of folks were looking for just a reliable demonstration of the ability to serve the needs of the membership, or the customer set, both from availability of products, service level, on time delivery, it’s really the nuts and bolts of wholesale distribution,” he explained. “I’m not trying to set the bar low, but I’m trying to address at a very critical level, I think, what the members and the customers of True Value really want to see, and that is excellence performed on wholesale distribution and stability within that.”
“If we’re fortunate enough to close on this transaction,” he continued, “what we want to be able to do is deliver a stable demonstrated support for all those members who are relying on True Value as their principal source of supply. What we want to do is kind of come alongside the operating units of True Value and help support that so that we’re delivering for those members.”
Of course, the flip side of that equation is what does this potential acquisition mean for Do it Best, and what strategic benefits does the organization see in this move.
“I would say there’s a great many in a list that I could give you but I think I would reduce that down to the critical top two,” Starr responded. “They are first and foremost scale. So I think from both the number of members and customers served, you’re talking about close to 8,000 independent dealers and that’s just a big step in terms of scale for us. So strategically that scale helps and it enables a lot of different things. It kind of unlocks a lot when it comes to improvements and efficiency and productivity as well as the capacity from a vendor standpoint to work with them kind of at a different level.
“The next thing I would point to is the retail brand,” Starr went on to explain. “I think that there’s an important addition to what we currently offer our membership that the True Value brand can provide. And I think that those two are both critical and the most important elements of the strategic value of the acquisition.”
This isn’t to say that the True Value name would go away with this acquisition. In fact, the post-acquisition branding will potentially take many faces, says Starr. “So we have members that are fully member branded locations where it’s clear that they are a Do it Best member but they’re advertising, their presence, their website.… is their unique brand. We already support members who utilize their own brand In that sense, we support members who utilize the Do it Best brand from a retail standpoint, and we would look to do the same with True Value.”
Starr points to bringing in a wider array of products as one method of supporting the True Value brand, introducing increased levels of lumber along with other offerings that maybe were not previously available.
But perhaps most importantly, Starr emphasized the importance of maintaining a culture that both members and customers have come to expect, pointing to the rich history of True Value, with its origins in 1938. “How they grew over time and I think some of that history is really important,” he said. “I think there’s a lot of folks in both leadership of Do it Best but as well as the current membership of Do it Best that learned a lot about what it means to be part of a co-op from prior leadership at True Value. And culturally, I would say that who we are today is very reflective of who True Value was during that era. And I think that there’s not just a cultural connection there that can exist, but it’s also an invitation to the folks who are current True Value members and customers that we really want them to kind of come home in a sense to a culture that is supporting them through a co-op environment. That, to me, is a critical message. I think that there’s a very easy fit because of those